Bankruptcy is not the only option

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A consumer proposal is a legally binding agreement that is regulated by the Office of the Superintendent of Bankruptcy. It is a very common solution used to solve problems with debt. Filing a consumer proposal often results in the repayment of only 30-70% of what you owe, through negotiation with your creditors.

Types of debt that can be included

A consumer proposal is intended to address your unsecured debt (debt that is not tied to an asset). Some examples include:

· Credit card debt;

· Bank loans or lines of credit;

· Payday loans;

· Income tax debt;

· Medical bills;

· Old banknotes that have gone to collections;

· Student loans (within some parameters).

A consumer proposal does not include debts secured on an asset. However, you can keep those assets during the proposal, as long as you can continue to make the payments.

Key Benefits of Submitting a Consumer Proposal

A consumer proposal is an alternative to filing for bankruptcy. It has several advantages:

· Provides immediate relief from unmanageable debt;

· Protects you from wage garnishments and legal action by your creditors;

· Reduces and consolidates your debt payment into one manageable payment;

· Generally costs less than other types of debt settlement options;

· Gives you a fresh financial start.

Qualification and who can help

There are certain criteria that must be met to submit a consumer proposal:

· You must be insolvent (debts are greater than your assets OR you can no longer keep up with your debt payments);

· You can’t pay all of your debt plus interest, but you can pay some of it;

· Your debt is less than $250,000 (excluding your mortgage);

· You are a Canadian resident or have property in Canada.

A Licensed Insolvency Trustee (LIT) is the only professional licensed and authorized to file a consumer proposal on your behalf. AN LIT is best qualified to help you understand your financial situation and the different options to deal with debt. An LIT will sit down with you in a nonjudgmental setting, discuss your situation with you, and help you decide on the best course of action.

If you’re having trouble making ends meet each month, finding the right debt solution can help. Visit the BDO debt solutions website for more information about bankruptcy, or call 1 855 BDO DEBT to schedule a free, no obligation consultation.

Jasmin Brown is a senior vice president overseeing the insolvency practice in Saskatchewan. She is committed to providing creative and practical debt solutions with empathy, understanding, and professionalism to help people overcome their financial difficulties.

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